TED Talks: Over the past few centuries, Western cultures have been very good at creating general prosperity for themselves. Historian Niall Ferguson asks: Why the West, and less so the rest? He suggests half a dozen big ideas from Western culture -- call them the 6 killer apps -- that promote wealth, stability and innovation. And in this new century, he says, these apps are all shareable. … [Read more...]
Archives for August 2012
Double Your Money
Investors pay too much attention to prices. That’s not investing. It’s trading. Sitting still and collecting dividends is investing. Let’s focus on the best part of dividend investing—dividend increases. I wrote about my “survival stock” Hormel last week. The company began paying its dividend back in 1928, when cool Calvin Coolidge was president of the United States. It hasn’t looked back since. On Friday, Hormel released its quarterly earnings. Thanks to products like Spam, earnings were up 14% from a year ago, and revenues by 5%. Hormel trades at around $28. It pays a quarterly … [Read more...]
Into the Abyss: The Bernanke Fed
Late yesterday, the Federal Reserve released the minutes from their last policy-setting meeting. In the minutes, Bernanke & Co. all but guaranteed investors that the Fed would fire-up the printing presses for a third round of money printing. The Fed has been dangling the carrot of QE3 in front of investors for months now. That’s partly why the S&P 500 held up better than foreign markets during the summer sell-off and why U.S. stocks are still up double digits for the year. But the meeting minutes signal that the Fed has decided to pull the trigger on more stimulus next month. Just in … [Read more...]
VIDEO: Niall “Hit-the-Road” Ferguson on Obama’s Record
(Bloomberg) -- Niall Ferguson, a history professor at Harvard University and a Bloomberg Television contributing editor, discusses his Newsweek magazine cover story about President Barack Obama's performance. Ferguson, speaking with Erik Schatzker and Sara Eisen on Bloomberg Television's "Market Makers," also talks about the potential impact of a Mitt Romney presidential victory on the economy. (Source: Bloomberg) … [Read more...]
Survival Stock
In seventh grade, my school had a program called “Survival” up in the woods of Western Massachusetts. It was for the whole grade. Not just for those who enjoyed the outdoors. It was a big deal—a rite of passage for all of us before moving on to the next grade. Each of us was allowed to fill a milk crate with food. But you had to carry it up to base camp three miles up a hill, so packing only what you could carry took on new meaning. Once base camp was set up, we were split into two teams. One team would go out for three days on the survival part, and the others would stay at base … [Read more...]
What We’re Reading 8-17-12
How Ethanol Causes Joblessness, Review & Outlook, Wall Street Journal Where Is Oil Produced?, EIA A Comprehensive List of Hyperinflations in History, Ian Vasquez, Cato Institute Fed 'Hawks' Weigh In Against More Action, Jon Hilsenrath, Wall Street Journal … [Read more...]
India: BRIC Broken
India, one of the much hyped BRIC countries (Brazil, Russia, India and China) has seen its currency plunge in recent months. Over the last 12 months the Indian rupee has lost 20% of its value (chart 1) compared to the U.S. dollar. If you have been one of the unfortunate investors who have owned Indian stocks over the last year, you are down 23% (chart 2). For much of the last decade the hucksters and promoters on Wall Street have pushed BRIC stocks as a growth story. But what your broker likely failed to mention during his pitch was the currency risk of investing in a … [Read more...]
Will the Fed Hold its Fire?
Core inflation (chart 1) registered a year-over-year growth rate of 2.1% in the BLS report released today. The reported rate of inflation is slightly above the Federal Reserve’s 2% target for core CPI growth. The Fed has recently hinted that it may begin another round of monetary stimulus. But with inflation above the Fed’s target, and capacity utilization nearing 80% (chart 2), the wisdom of new monetary stimulus must be questioned. … [Read more...]
Don’t Save Yourself Short
Chances are you’re not saving enough. To find out for sure, do this simple exercise. Calculate how much you expect to save by the time you retire. Then calculate what percentage of your savings you’ll need to spend each year to sustain your standard of living (while factoring in investment returns of course). If you answered more than 4%, you aren’t saving enough. Take a look at the chart below. An investor retiring in 1946, who put her money in a balanced portfolio of stocks and bonds, would have exhausted her nest egg only 33 years later if she was taking 5% a year from her portfolio. The … [Read more...]
What We’re Reading 8-10-12
Two legends in economics wrestle over the euro's future, Shawn Tully, Fortune UN urges US to cut ethanol production, Blas and Meyer, Financial Times American Hero, Thomas G. Donlan, Barron’s Coming to a State Near You, Review & Outlook, The Wall Street Journal … [Read more...]